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| Department of telecom waters down proposal on spectrum fee for incumbents |
| Tuesday, 03 July 2012 | |
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The department of telecom (DoT) has been forced to modify a proposal that would have made it compulsory for existing operators to pay the auction-determined price for all airwaves they currently hold, following opposition from the finance ministry, Planning Commission, and department of industrial policy and promotion (DIPP). The Cabinet on Tuesday will consider a fresh proposal that includes three options - to impose a one-time fee on all airwaves held by existing telcos; to levy this fee on airwaves held beyond the start-up spectrum of 4.4 MHz; or to levy this fee on airwaves held beyond the contracted spectrum of 6.2 MHz. The final decision has been left to the Cabinet. A finance ministry office memorandum dated June 30, which expresses the ministry's opposition to DoT's original proposal, says these issues have the approval of the prime minister and the finance minister. Prime Minister Manmohan Singh is currently holding charge of the finance portfolio. A DoT official said the concerns raised by these ministries along with the department's detailed responses were being presented to the Cabinet on Tuesday. The Supreme Court has instructed the government to complete the auctions by August 31, but inter-ministerial bickering could delay the process. The Empowered Group of Ministers on spectrum, which has been constituted to manage such differences of opinion, was scheduled to meet on Monday, but the meeting was called off after newly-appointed chairman Sharad Pawar told the PM that he was unwilling to take on this responsibility. DoT said its preferred choice remained asking existing operators to pay auctioned-determined price prospectively for all spectrum they currently held, and warned that other options would not provide a level playing field between new entrants and incumbents. DoT Wants Incumbent Telcos to Match Auction Price If the Cabinet endorses the option of asking existing players to match the auction price for all airwaves they hold for the remaining period of their licences, the exchequer will be richer by 105,803 crore, said the Cabinet note. But this proposal will adversely impact dual-technology operators such as Reliance Communications and Tata Teleservices whose permits are valid for many years to come. The second option of charging telcos for all their spectrum holdings beyond 4.4 MHz (2.5 MHz in the case of CDMA players) will reduce this figure to 48,121 crore. –The Economic Times |
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